Canada Poised to Become a Major Player in the Global Liquified Natural Gas Market

Strategic Insights -

Canada's energy sector is experiencing a significant shift, with the country poised to become one of the world's largest exporters of liquified natural gas (LNG). The recent start-up of LNG Canada in June marked a significant milestone, and the potential doubling of its capacity would propel Canada to the sixth-largest LNG exporter globally. Several more LNG projects are under development, primarily targeting the booming Asia-Pacific market.

As LNG demand rises, driven by its use as a "bridge" energy source, replacing oil and coal, Canada's energy superpower status is taking shape. The Carney government is committed to creating a pillar of Canadian energy superpower status with LNG, despite the environmental concerns surrounding fossil fuel development.

Key Takeaways:

  • The first phase of LNG Canada, a $48.3 billion project on B.C.'s northwest coast, is among the biggest private-sector infrastructure projects in Canadian history.
  • The expansion of LNG Canada, dubbed LNG Canada Phase 2, is prominent among the five "nation-building" infrastructure projects announced by Prime Minister Mark Carney to expedite.
  • The Carney government is expected to give favourable consideration to additional LNG plants and at least one crude oil pipeline project.
  • The Trans Mountain Pipeline (TMX), a federal Crown corporation, could expand its capacity by 30% or 300,000 barrels per day with the addition of more pumping stations.
  • The Northern Gateway oil pipeline project, blocked by the Trudeau government, may be revived, and an expansion of the port at Churchill, Man. could become an "energy corridor" terminal.
  • The compelling reasons for Carney's more positive regard for fossil fuel developments include exploiting Canada's natural resources to make the economy more resilient and generating momentum for building big.
  • Private capital is expected to be the chief source of funding for big infrastructure developments, with the Carney government counting on investors to come on board after seeing the start of early projects.
  • Ottawa is negotiating with LNG Canada owners to modify the design of LNG Canada Phase 2 to make it powered by clean hydroelectricity, rather than burning more natural gas.
  • The Ksi Lisims LNG project, a $10 billion venture in northwest B.C., will be powered by hydro and serve Asia-Pacific markets in 2029.

Statistics:

  • $48.3 billion: Estimated cost of the first phase of LNG Canada
  • 30%: Possible increase in Trans Mountain Pipeline capacity
  • 300,000 barrels per day: Potential increase in Trans Mountain Pipeline capacity
  • $34 billion: Estimated cost of the Trans Mountain Pipeline (TMX)
  • $5.9 billion: Estimated cost of the Cedar LNG project
  • $12 billion: Estimated cost of the Woodfibre LNG project
  • $10 billion: Estimated cost of the Ksi Lisims LNG project
  • 2027: Scheduled start of production for the Woodfibre LNG project
  • 2028: Scheduled start of production for the Cedar LNG project
  • 2029: Scheduled start of production for the Ksi Lisims LNG project

Sources:

  • David Olive, "Canada is poised to join the ranks of the world's largest exporters of liquified natural gas (LNG)." (www.thestar.com)
  • Book by Mark Carney, "Value(s): Building a Better World for All." (2021)
  • Tim Hodgson, federal energy minister, statement on LNG Canada Phase 2.